JetNet August12_PAMA interview November06 23/07/2012 17:03 Page 3
JETNET >>KNOW MORE
FUEL PRICE The great news is that fuel prices are down 7% (50 cents per gallon of Jet-A fuel) since April 2012. The latest period reported by GlobalAir shows the price of Jet-A fuel is at $6.38 per gallon. June 2008 was the record month for Jet-A when the price reached $7.11 per gallon. Chart C (right) reports Jet-A prices on a quarterly basis, thus it does not represent June 2008’s peak Jet A price of $7.18 (instead reflecting an averaged-out quarterly peak of $6.83), and it does not yet reflect the decline to $6.38 per gallon, but it is coming! What is interesting is to look at the two periods of time when the fuel price peaked. The earlier one was shorter lived (Fuel Bubble #1) compared to the recent one (Fuel Bubble #2) that has slowly increased to nearly the same record level and will now start to decline as we report the 3Q 2012 in a future article. The question will be whether this decline becomes long-lasting or not.
SUMMARY The year 2012 is only half way through, and most of the trends show recovery. It is comforting to learn about the decline of fuel prices and to finally see new aircraft orders from the largest fractional provider. While not reported in this article, toward the end of July the US Bureau of Economic Analysis (BEA) was scheduled to report the first estimate of the US Gross Domestic Product (GDP) for the 2Q 2012. During June the BEA reported the 1Q 2012
CHART C - U.S. JET A FUEL PRICE PER GALLON Chart C
8.00 7.50 7.00
2006 to 2012 By Quarter High = $6.83 Low = $4.61 Avg = $5.46
6.00 5.50 5.00 4.50 4.00
Source: GlobalAir.com; Presentation and Analysis by Chase & Associates
GDP results at 1.9%. We are hopeful that the 2Q 2012 results are much improved over the 1Q results. As has been reported in previous articles, a 3.0%-or-greater level of GDP growth is the percentage level of economic growth at which Business Aviation has shown strong activity historically. We will continue to monitor this slow but steady Business Aviation recovery and hope it continues, even after the summer days of 2012 become history. ❯ For more information:
• JETNET can be contacted at 101 First Street, Utica, NY 13501; Tel: 800-400-2298; Web: www.jetnet.com or www.avdatainc.com * You can now follow JETNET on Twitter at www.twitter.com/JETNETLLC
❯ Do you have any questions or opinions on the above topic? Get them answered/published in World Aircraft Sales Magazine. Email feedback to: editorial@avbuyer.com
• Michael Chase is president of Chase & Associates, and can be contacted at 1628 Snowmass Place, Lewisville, TX 75077; Tel: 214-226-9882; Web: www.mdchase.com • Marj Rose is president of MarketLift, Inc. and can be contacted at P.O. Box 595036 Dallas, TX 75359; Mob: 214-862-8992, Web: www.market-lift.com
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Business Aviation WORLD AIRCRAFT SALES MAGAZINE – August 2012
Fuel Bubble #2
6.50
Find an Aircraft Dealer 128
Fuel Bubble #1
Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q22011 Q3 2011 Q4 2011 Q1 2012 Q2 2012
This sign of recovery was followed by ARGUS’s TRAQPak data showing that June 2012 business aircraft flight activity actually decreased 3.2% from May 2012. Looking at individual market segments, the month was not all negative with large-cabin fractional activity posting a 3.3% month-over-month increase. When comparing June 2012 activity to June 2011, TRAQPak also reported an overall decrease of 1.3% in flight activity. Two words come to mind here – ‘Slow Recovery’!
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